Galp Energia, Sgps S.a. Class B · EURONEXT:GALP

Galp Energia, Sgps S.a. Class B — Galp Energia — Investor Presentation (March 2009)

35 slides from Galp Energia, Sgps S.a. Class B's investor presentation, Mar 5, 2009

  1. Slide 1: Strategy Update - 2013

    STRATEGY UPDATE - 2013 Lisbon, 5 March 2009

  2. Slide 2: Galp Energia in a transformational phase

    GALP ENERGIA IN A TRANSFORMATIONAL PHASE Working interest production Diesel production kboepd kboepd 10x 150 +40% 140 100 15 2008 Target 2008 Target Sales to direct clients Natural gas supply Refining Bcm coverage % +6p.p. 100 2x 12 94 6 1 2008 Target 2008 Target 2 STRATEGY UPDATE - 2013 1 Pro-forma

  3. Slide 3: Exploration & Production

    EXPLORATION & PRODUCTION © galp energia

  4. Slide 4: Very strong resource growth

    VERY STRONG RESOURCE GROWTH 1 Galp Energia resource base Bln boe • Level of resource base already allows to reach a target 4.1 production level of 150 kboepd on a reliable basis • Existing quantified resource base equivalent to 73 years of 2.1 production at 150 kboepd • Current resource base ready t

  5. Slide 5: Intensive exploration work until 2013

    INTENSIVE EXPLORATION WORK UNTIL 2013 Total net exploration area 2 Km • Almost 12,000 Km of 2 active net exploration area, out of a total area of 12,000 68,000 Km2 8,000 • Galp Energia’s exploration works to be intensive in 4,000 the next five years 0 • Still a major part of Galp 2008 2009 2010 2011

  6. Slide 6: A very intensive drilling program in 2009

    A VERY INTENSIVE DRILLING PROGRAM IN 2009 % Galp Drilling Campaign Drilling Campaign Block / Basin Operator Seismic Energia 2009 2008 Block 14 OFS Chevron 9% - - - 22 D 2E 1A Angola Block 32 OFS Total 5% - - 2A - - 3A Angola LNG II OFS Sonagás 10% 3D 1E - - - - BM-S-8 OFS Petrobras 14% - - 1A - 1E -

  7. Slide 7: Setting up Angolan assets for production

    SETTING UP ANGOLAN ASSETS FOR PRODUCTION Projects pipeline Crude production 1 kboepd 26 Peak Block Projects Start-up production 2 22 18 Tômbua-Lândana 2009 120 – 140 16 15 Lucapa 2014 100 – 130 10 14 14 Malange 2014 20 – 40 // // Gabela TBD TBD 2008 2011 2013 Negage TBD TBD Working interest producti

  8. Slide 8: First oil from Tupi in 2Q 2009

    FIRST OIL FROM TUPI IN 2Q 2009 Extended well test • Initiating production in 2Q 2009 • Production expected to reach 14 kboepd, limited by gas handling constraints Project Tupi-1 already approved • Galp Energia expected capex over $350 Mln • Major contracts awarded • Oil processing capacity: 100 kboe

  9. Slide 9: Brazil becoming the key producing area

    BRAZIL BECOMING THE KEY PRODUCING AREA Production volumes • Tupi pilot project production will be kboepd the major contributor to production growth, from 2011 onwards 18 • Onshore Brazilian production to ramp up in 2013 7 • EWTs of Iara, Bem-te-vi, Caramba 0 and Jupiter to start in 2012/2013 // // 2

  10. Slide 10: Multiply by 10 existing production in 12 years

    MULTIPLY BY 10 EXISTING PRODUCTION IN 12 YEARS 1 Production volumes • Production to benefit from kboepd continued growth in Angola with CAGR projects as Lucapa, Malange, Block > 20% 150+ 32, etc • Brazil ramp up boosting 80+ production at double digit levels with Tupi, Iara, Jupiter, etc 40 15 • Lon

  11. Slide 11: Brazil contribution to start

    BRAZIL CONTRIBUTION TO START E&P Capex E&P EBITDA CAGR 2008-13 € Bln 1.9 Others Others 1.5 Angola Development 21% 17% Brazil Exploration 1 2008-12 2008-12 Type 2009-13Segment Usd 57/bbl 1 Usd 80/bbl 2 • The bulk of the capex is focused • Constant growth in terms of in development works in EBITDA Usd

  12. Slide 12: Refining & Marketing

    REFINING & MARKETING © galp energia

  13. Slide 13: Refining assets to take advantage of higher diesel demand

    REFINING ASSETS TO TAKE ADVANTAGE OF HIGHER DIESEL DEMAND Europe product supply balance Upgrade projects economics 1 • Execution of the conversion project 2008 2013 on time and on cost (1,189) • Capex of €1.3 Bln • Increase of capacity utilization towards (1,402) 95% • Flexibility to change yield, d

  14. Slide 14: Towards a fully integrated R&M portfolio

    TOWARDS A FULLY INTEGRATED R&M PORTFOLIO Sales to direct clients • Integration of R&M activities very close to Refining target coverage % Target – 100% • Higher integration decreases volatility in To be achieved earnings of the division Iberian acquisitions • Recent Iberian acquisitions crucial to h

  15. Slide 15: Important defensive cash flows set to increase

    IMPORTANT DEFENSIVE CASH FLOWS SET TO INCREASE 1 Marketing EBITDA vs Ref. margin AGIP & ESSO economics • Unlock synergies and Refining margin economies of scale within logistic costs and products AGIP supply acquisition EBITDA impact • 325 CO’s and 183 C-stores 1Q07 4Q08 added • Significant retail n

  16. Slide 16: Strong growth from R&M segment

    STRONG GROWTH FROM R&M SEGMENT R&M Capex R&M EBITDA CAGR 2008-13 € Bln 2.8 2.2 Maintenance Marketing 11% 13% Refining Growth 1 2 2008-12 2008-12 Type 2009-13Segment Worst case scenario Base case • Capex mainly driven by the • Incremental EBITDA due to Iberian conversion project at Sines acquisitions

  17. Slide 17: Gas & Power

    GAS & POWER © galp energia

  18. Slide 18: Infrastructure NG assets assures predictable cash flow

    INFRASTRUCTURE NG ASSETS ASSURES PREDICTABLE CASH FLOW • Current RAB NG distribution of €1,016, NG distribution RAB & capex to increase with capex and inflation, with € Mln 279 a ROR of 9% • Current RAB NG underground storage of 1,016 €17 Mln, to increase with capex and inflation, with a ROR of 8% R

  19. Slide 19: NG supply volumes driven by power projects execution

    NG SUPPLY VOLUMES DRIVEN BY POWER PROJECTS EXECUTION Natural gas volumes • Flexibility to lock higher returns between Bcm CAGR gas and power value chains 7.1 5% 5.6 Liberalized • CCGT will allow to materialize value in Liberalized natural gas contracts by arbitrage between gas trading and power Regu

  20. Slide 20: EBITDA growth mainly driven by regulated capex

    EBITDA GROWTH MAINLY DRIVEN BY REGULATED CAPEX G&P Capex G&P EBITDA CAGR 2008-13 € Bln 1.1 1.0 Non regulated Power 14% 10% Regulated Gas 2008-12 2008-12 Type 2009-13Segment 1 No liberalized Base2case NG margin • G&P capex translating the expansion • Increase in NG volumes expected of Power’s portfol

  21. Slide 21: Summary

    SUMMARY © galp energia

  22. Slide 22: E&P will gradually assume the main role in capex

    E&P WILL GRADUALLY ASSUME THE MAIN ROLE IN CAPEX • R&M capex concentrated on conversion project execution, as AGIP and ESSO Capex networks were acquired in 2008, putting € Bln the R&M closer to ideal fit in terms of complexity and refining coverage 5.3 5.2 1.0 1.1 • G&P capex to focus on regulated a

  23. Slide 23: Galp Energia's portfolio offers substantial growth

    GALP ENERGIA’s PORTFOLIO OFFERS SUBSTANTIAL GROWTH • Execution of Tômbua-Lândana EBITDA CAGR 2008-13 and Tupi pilot project responsible for more than double crude production CAGR >15% • Refining upgrade project and CAGR 2007-12 marketing integration boosting >12% EBITDA of R&M division • Predictable

  24. Slide 24: Financing and liquidity

    FINANCING AND LIQUIDITY © galp energia

  25. Slide 25: Funding needs for 2009 secured

    FUNDING NEEDS FOR 2009 SECURED • Strong cash flow generation but not Operating cash flow and liquidity enough to cover capex programme needs • Liquidity of €0.6 Bln, of which €0.8 Bln committed credit lines represent 65% €0.6 Bln of available facilities • Financing needs in 2009 will be covered by a

  26. Slide 26: Securing financing after 2009

    SECURING FINANCING AFTER 2009 Galp Energia overview • Commitment to a strong and a trustable capital structure Galp Energia • Different options being studied to balance capital structure and to secure financing after 2009 Exploration Refining Gas & & & Production Marketing Power • Decision to be exe

  27. Slide 27: Conclusion

    CONCLUSION © galp energia

  28. Slide 28: Galp Energia's portfolio offers superior growth

    GALP ENERGIA’S PORTFOLIO OFFERS SUPERIOR GROWTH EBITDA EBITDA growth growth above above 15% 15% supported supported by by all all business business segments segments Total resources Total resources of of 4.1 4.1 Bln Bln bbls, bbls, 3.3 3.3 Bln Bln more more than than in in 2007 2007 l w a y s Financ

  29. Slide 29: Appendix

    APPENDIX © galp energia

  30. Slide 30: Current environment to benefit simple refining margins

    CURRENT ENVIRONMENT TO BENEFIT SIMPLE REFINING MARGINS 1 Spread Heavy /Light • OPEC supply cut focus on heavy crude results in the lower spreads of heavy crude to light crude, thus 7.4 benefiting relative higher exposure 4.3 to light crude Jan-08 Mar-08 Mai-08 Jul-08 Set-08 Nov-08 • Recent relative

  31. Slide 31: Integrated biodiesel project is key

    INTEGRATED BIODIESEL PROJECT IS KEY Biodiesel economics • Galp Energia’s integrated venture is positioned to match Portuguese • Capex 2009-13 of €150 Mln in legislation for 2010, which biodiesel plant and feedstock projects mandates a 10% use of biofuels • Estimated EBITDA of €15 Mln by 2013 • Galp

  32. Slide 32: Natural gas sourcing confers competitive advantage

    NATURAL GAS SOURCING CONFERS COMPETITIVE ADVANTAGE Natural gas volumes • Current sourcing base, with 60% of LNG Bcm CAGR increases flexibility to explore trading 5% 7.1 opportunities as LNG demand-supply 5.6 imbalance to expand in ML-term Liberalized Liberalized • Galp Energia own consumption to rea

  33. Slide 33: Executing the power portfolio

    EXECUTING THE POWER PORTFOLIO Added capacity • Special regime with a granted tariff period MW of 15 years, benefiting from priority access to the grid 2009 80 Sines cogen 1 • Cogeneration tariff of 105.23 €/MWh , 80 Porto cogen reduced by half of environment charge of 2010 €4.5/Mwh, after 10 years o

  34. Slide 34: Disclaimer

    DISCLAIMER Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “will,” “may,” "continue," “should” and similar expres

  35. Slide 35: Investor Relations

    Investor Relations Tiago Villas-Boas Tel.: +351 21 724 08 66 Fax: +351 21 724 29 65 E-mail: tiagovb@galpenergia.com Website: www.galpenergia.com

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